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For airlines, online trade puts the "ouch" in voucher
by Jeff Horwich, Minnesota Public Radio
March 10, 2005

Thinking of using a airline ticket voucher you bought online for a discount on your next flight? You might pull it off -- but the airlines are looking for you. (MPR file photo)

Since 2001, the nation's large airlines have faced major financial challenges: Fear of flying after 9/11, soaring fuel costs, the rise of low-cost airlines and price-conscious business travelers. Eagan-based Northwest and other carriers have lost a combined $30 billion in the past three years. Amid that sea of red ink, the airlines continue to face a small but stubborn trickle, brought on by the Internet age: the black market trade in airline ticket vouchers.

St. Paul, Minn. — "Tom" is 26 and lives in St. Paul with his wife. Tom didn't want to use his real name -- because he is doing something against the rules, and he knows it. It started with a trip to Egypt last year.

"Our flight to Amsterdam was turned back at the terminal, and we had to change planes, and it was a big hassle," Tom says. "They gave everybody on the flight these vouchers. My wife and I each got one. They're good for travel before the middle of June or something like that, and we just won't have any use for them before then."

Tom's instinct was the same as with other things he has no use for -- sell it online. In this case, Tom went to Craigslist, a free and mostly unregulated classified ad Web site. He asked $25 each for vouchers that save $50 on a domestic Northwest Airlines ticket.

"I saw on the (voucher) that it said that it was void if transferred, but for the life of me I couldn't figure out how they'd be able to tell," Tom says. "And frankly, I didn't really care what Northwest's position on it was."

As it turns out, Northwest's position is very clear: If they catch you, you're in big trouble. The airline will not only void your ticket and keep your money, but will revoke your frequent flyer miles and any special traveling privileges. Most other airlines have a similar policy.

Northwest shared its policy, but declined to be interviewed on the voucher trade.

Terry Trippler of the travel Web site FareFacts.com believes the airline should not hesitate to strand travelers who break the rules.

"So now you get to the airport and they catch you with that voucher, and that voucher is null and void," Trippler says, describing one scenario. "Now they say, 'You can still go to L.A., the one-way walk-up coach fare is $525.' And you're faced with paying that or going home."

But Trippler says the way airlines issue and process vouchers leaves them open to abuse. Many vouchers consist of one or two codes entered online or given to a reservations agent. In practice, it seems those codes can be given away or sold with little consequence.

The best proof of that might be on eBay.

"Our experience has been that we get very few, if any, fraud complaints with regard to the sale of travel vouchers," says Hani Durzy, a spokesman for the online auction Web site. "What that tells us is that the buyers are happy with their transaction. And they're probably only going to be happy with their transaction if they can use the item they bought for its intended purpose."

As something of an underground phenomenon, the overall size of the market for airline vouchers is difficult to measure. The traffic on eBay gives some indication. This week a search for "airline voucher" turned up almost 400 listings.

Durzy says eBay accommodated the airline industry to ban the sale of tickets and other items that can only be sold by travel agents. But it continues to deny a standing request from the airlines to remove listings for vouchers and frequent flyer miles.

Durzy says if there's a buyer and seller, and it's legal, eBay exists to create the market -- even if that violates an airline company's policy.

"There's nothing illegal about owning a travel voucher, nothing illegal about distributing it, and so we allow people to sell them," Durzy says.

eBay users be warned, though: Northwest says it scans voucher listings daily to see who's selling. If the airline can match a seller to a Worldperks account, the account is frozen or closed.

Travel expert Terry Trippler says airlines have bigger financial issues these days than playing "voucher police." But they could make the problem go away by changing the way vouchers are issued.

"No. 1, the vouchers (could be) strictly nontransferable. If a voucher is issued to John Smith, that's the only person who can use that voucher," Trippler says. "Another way would be to just quit handing them out. When a flight is oversold, you owe people their money back. Just give them their money back -- then you don't have to worry about the vouchers."

That's a change Trippler concedes is unlikely anytime soon.